While consumer outrage has been obvious, the health of the banks themselves has been harder to judge. Everyone knows that the ongoing recession has taken a toll on the country's biggest banks, but up until now no one has known just how dramatically they have been affected.
Geithner said Wednesday that the stress tests will be "an important next step forward" in understanding where the banks stand.
"What these results will do is they will bring in a level of transparency to bank balance sheets that will allow investors to judge, make it easier for them to raise capital, improve confidence that this system is going to be strong enough to get through this, and that will be enormously helpful," Geithner told PBS's Charlie Rose in an interview Wednesday evening. "…(I)t will help lift this fog of uncertainty over the financial system, and I think the results will be, on balance, reassuring."
The International Monetary Fund has estimated that there will be $2.7 trillion in losses on U.S. loans and securities, with the brunt of these losses being felt by the biggest banks.
Critics question whether the stress tests were tough enough.
"Overall, I remain concerned that the stress tests aren't adverse enough," said Srinivasan, noting it's possible unemployment levels could "continue to only rise through 2009," beyond the government's stress test scenario.
Government officials have indicated that the banks are currently well-capitalized.
"I've looked at many of the banks and I believe that many of them will be able to meet their capital needs without further government capital," Federal Reserve chairman Ben Bernanke told the Joint Economic Committee on Tuesday.
But Nobel Prize-winning economist Paul Krugman argues that a number of the banks are actually insolvent.
"The 19 banks are not fine," he said Sunday on ABC News' "This Week Green Room."
"It's not going to work," Krugman said of the stress tests. "I give...Geithner points for fine use of the English language. A few weeks ago he said the vast majority of U.S. banks are well-capitalized, which is undoubtedly true -- there are probably 7,500 banks that are just fine. Unfortunately the 19 banks that are not fine have two-thirds of the assets."
But Geithner said yesterday that none of the nation's 19 biggest banks subjected to the government's stress tests are insolvent.
"None of those 19 banks are at risk for insolvency," Geithner told Rose. "Now, again, these banks, they bear the biggest responsibility for making sure that they can reassure investors that they're going to be strong and viable in the future.
"We'll indeed help them do that if that's necessary, but they bear the responsibility for making sure they can convince their investors and their creditors that they can get through this with a strong, viable franchise, and I think they're going to be able to do that."
Geithner acknowledged that some banks will complain the tests were too tough, while some critics will complain the tests were not tough enough. But he said the tests were important so the government could "look under the hood" of the big banks.
"For the first time ever, we brought the nation's financial supervisors together, and in an unprecedented step, asked them to do a careful look under the hood, to take a careful look at how much -- how strong these institutions were in the event things got worse," he said.